Prime Minister Shinzo Abe’s effort to strengthen ties with Southeast Asia appears to be paying off, at least in the banking industry.

Myanmar on Wednesday granted Japan’s top three banks licenses to start operations in the country, viewed as one of the “last frontiers” for investment in the fast-growing Southeast Asia region. Read More »

Ridding Japan’s banking system of loans to organized crime presents major challenges both in terms of identifying suspicious customers and the risk of legal action from borrowers who have their bank accounts canceled or even malicious threats from gangsters.

The recent shady loans scandal at Mizuho came amid government moves to tighten “know your client” rules and stiffen penalties on banks that make such loans. But it’s not all a case of stepping up punishment. Amid the crackdown, financial institutions looking to get questionable clients off their books can also get assistance: the government is offering to buy back shady loans. Read More »

The 102-page report by an investigative panel of lawyers into why Mizuho Bank didn’t pull the plug on $2 million in loans to crime-syndicate members provides some answers into what went wrong.

Among them: The panel said executives who initially started handling the problem didn’t fully brief their successors, following a management overhaul caused by a separate, unrelated computer-system breakdown in 2011. Read More »

An investigative panel of experts blamed Mizuho Bank officials’ “lack of awareness” for the lender’s failure to cut off loans its affiliate made to crime-syndicate members.

The panel of three external lawyers compiled a report spanning 102 pages, wrapping up a 20-day investigation that included hearings of 85 officials of Mizuho and its affiliate. For our JRT readers who haven’t a gotten a chance to review the report, here are the eight problems the panel identified. Read More »

Japanese executives aren’t known for their straight talk, and putting things in black and white isn’t necessarily a praised virtue in Japanese culture.

Still, reporters were left scratching their heads after a lengthy 100-minute news conference by the chief executive of Mizuho Financial Group, his first formal appearance since regulators sanctioned the bank last month for loans to crime-syndicate members. Read More »

Ironically, the recent sanction meted out by Japan’s financial watchdog to Mizuho Bank for sloppy compliance comes just as the Tokyo lender had started to prioritize getting its complicated management structure in order.

The slogan, “One Bank Mizuho” was meant to signal how the cumbersome (some would say disfunctional) management structure left over from the merger of three banks more than a decade ago — Dai-Ichi Kangyo, Fuji Bank and the Industrial Bank of Japan — would soon be a thing of the past. Read More »

Wrapping up the Bank of Japan’s latest policy meeting, BOJ Gov. Haruhiko Kuroda acknowledged that the U.S. government shutdown is a new threat facing Japan’s economy.

As widely expected the BOJ board took no new policy decisions at the meeting six months into the new regime’s monetary easing of a “different dimension,” so here are five takeaways from what did result from Mr. Kuroda’s press conference. Read More »

The discovery of 230 transactions with organized crime syndicates totaling about Y200 million ($2 million) at Mizuho Bank Co. – one of Japan’s largest banks — shows how easily finance-savvy yakuza can secure funds in the world’s third-biggest economy, despite repeated crackdowns.

Over the past two decades, lawmakers and regulators have passed a series of laws and ordinances aimed at curtailing organized crime. Starting with laws in 1991 making typical yakuza activity and money laundering illegal, Japan has been stepping up penalties and stiffening up “know your client” rules. Banks were obliged to check customers’ IDs and report information on money laundering, while regulators were given more authority to monitor suspected money-laundering behavior.

But those rules look tame by international standards. Under 2011 yakuza-exclusion ordinances, companies are merely required to “try” to confirm they are not engaged in transactions with a gang member. Failure to make adequate efforts to ID a client could lead to a prison term of up to one year or a fine of up to Y1 million. Read More »

Mizuho Bank said Monday some of its automatic teller machines operations will be restored Tuesday morning after a three-day weekend shutdown due to the bank’s wider systemic problems.

The retail banking unit of Mizuho Financial Group Inc. said about 3,500 of its ATMs at its 440 branches will be functioning from Tuesday morning for cash deposits and withdrawals, with cash transfers available starting at noon. But ATMs outside its branches will remain closed Tuesday to facilitate a faster recovery of the malfunctioning computer system, which has affected more than one million cash-transfer orders since March 15.

Satoru Nishibori, Mizuho Bank president, said Monday at a press conference that the bank will try its best to fully restore the system by Wednesday. The bank said it will likely be able to settle 890,000 unprocessed transactions from Tuesday. Mizuho has blamed a surge in deposits following the earthquake on the system breakdown, but declined to give further details. Read More »

About Japan Real Time

Japan Real Time is a newsy, concise guide to what works, what doesn’t and why in the one-time poster child for Asian development, as it struggles to keep pace with faster-growing neighbors while competing with Europe for Michelin-rated restaurants. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, the site provides an inside track on business, politics and lifestyle in Japan as it comes to terms with being overtaken by China as the world’s second-biggest economy. You can contact the editors at japanrealtime@wsj.com